Saturday, June 20, 2009

Activision Blizzard, the world's largest third party publisher, has warned that they "might have to stop supporting Sony" as early as next year, the company's CEO Robert A. Kotick told the British daily newspaper The Times.

I'm getting concerned about Sony; the PlayStation 3 is losing a bit of momentum and they don't make it easy for me to support the platform. It's expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation. (...)

They [Sony] have to cut the price, because if they don't, the attach rates are likely to slow. If we are being realistic, we might have to stop supporting Sony. (...) When we look at 2010 and 2011, we might want to consider if we support the console — and the PSP [portable] too.

Analysts have already predicted doom and gloom for Sony Computer Entertainment, which is nothing unusual. Analysts do not have to be terribly diplomatic and others have voiced similar criticism concerning the other console manufacturers. But this is not the first time that Sony has been confronted with unusually harsh criticism by third party publishers, which is rare in this industry.

Back in May and September of 2007, respectively, Ubisoft CEO Yves Guillemot demanded a price cut for the console ("They have to decrease the price quite significantly") and Square Enix president Yoichi Wada criticized Sony's marketing efforts ("[The future of the PS3] would be tough if its marketing strategy is not straightened up.")

The future of the PlayStation depends on when Sony will reduce the PS3's price tag. The latest guess by an analyst is August. But I maintain that Sony simply has not got the financial resources to reduce the price until Christmas. Sony CEO Stringer has made it quite clear that he puts profitability above everything else.

The real question is, though, whether Activision Blizzard is merely bluffing or if these unusually harsh comments contain a very real threat. Sure, a number of the publisher's games sold more than a million on the PS3. So the console generates revenue for them. We simply don't know what little profit is left. Kotick revealed some of the additional costs of developing for Sony, noting that Activision Blizzard "paid $500 million to Sony in royalties and other goods last year." Again, such a disclosure is highly unusual. What is Kotick up to? Please share your thoughts in the comments section.

Of course Bobby’s bluffing, and good for him. (...) I think Bobby’s obviously interested in Sony selling as many PS3s as they possibly can, and he’s not happy with their penetration so far. I think he favours a price cut, and would rather see one sooner than later.

EDIT As expected, the news of Activision's threat has sparked a lively debate, which I will attempt to capture here, in the familiar style of guest commentary.

Sony's clearly in a pinch

Is the PS3 really losing momentum? It depends, as usual, on where you're standing. Since the system launched in late 2006, it's clearly been growing in year over year unit sales. In 2008--the system's best year yet--Sony sold over 10 million PS3s worldwide. And while sales have been down for all contenders recently, Sony's sold nearly as many PS3s worldwide as Microsoft has Xbox 360s so far this year. Of course Microsoft still has more than a third as many Xbox 360s in the wild, but since 2008, Sony's slowly (very slowly) been gaining. (...)

That said, Sony's clearly in a pinch. Its game division lost nearly $600 million in 2008, the PS3 consistently lags in NPD's US sales reports, and the system charts the fewest high sales software titles month after month.

If Sony lowers the PS3's price, we've been assuming they'll lose even more money. But if they keep it sky-high, they theoretically stifle sales and by virtue thereof, their growth rate, frustrating publishers, who naturally want to sell to as many customers as possible.PC World

That’s pretty serious considering Activision is the largest video game publisher in the world. It probably won’t come to that — I can’t see them not lowering the cost in the next year or so regardless of what Kotick thinks — but if I were Sony I would definitely be a little nervous about this. If this inspires some bravado in EA and they make a similar statement it could seriously hurt console sales.A+E Interactive

The pressure is on

For its part, Sony, which is mired in third place behind Nintendo and Microsoft in the next-gen game-console wars, keeps saying it won't be pressured into trimming the price of the PS3. But with industry heavyweights like Activision making these types of remarks, it's becoming more and more clear that the pressure is indeed on. CNET

Ever saw a publisher threaten a platform holder?

In that absolute worst-case scenario, that would mean no Call of Duty for Sony consoles. No Guitar Hero for Sony consoles. No Tony Hawk, either. It probably won't ever come to that, of course, but Kotick's words are still worth noting. After all, when was the last time you ever saw a third-party publisher so openly threaten a major platform holder?Kotaku

A huge bomb

Activision boss Bobby Kotick has dropped a huge bomb on Sony. (...) While Kotick may sound a bit cocky here, I don't think Sony wants to sit on statements like these. And no one is going to argue about the PS3 needing a price cut either.Destructoid

Nintendo has issued similar denials

Sony has continued to insist that it will not be pressured into lowering PS3 prices before the 2009 holiday season.

"I think everybody but us would love to see it given away for free," Jack Tretton, president and CEO of Sony Computer Entertainment of America told CNBC. He added that cheapest wasn't always the most successful, but rather, "what you get for your dollar."

It should be noted that Nintendo has issued similar denials regarding a lowered Wii price tag, despite confirmation of a (May) 57 percent year-on-year drop in sales. TG Daily

What if EA said the same thing?

Now, Kotick's words are just corporate smacktalk (bottom line: Activision still makes money on the platform). But what if a company like EA came forward and said the same thing? No good can come of this for Sony.Gizmodo

Activision Blizzard needs the numbers Sony delivers

Is it a credible threat? That is hard to say, but the industry has ample evidence of just how ruthless Activision Blizzard has become. (...) By slamming the console maker in public it creates a perception of weakness witih Sony's platforms. Now the developer is in a very good position to bargain for lower licensing fees, help with advertising dollars, or other financial rewards to "stick with" the PS3 and PSP platforms.

It's doubtful Activision Blizzard has lost money by supporting the PS3 and PSP as platforms, and again, the company needs the numbers Sony delivers to meet its goal of having Modern Warfare 2 be the "biggest property launch of all time." What Kotick can do is attack Sony in the press and create a perception of weakness and then exploit it for better terms when releasing these blockbuster titles, and that's what we're seeing here.Ars Technica

A crazy precedent

Activision is the world's largest third-party publisher, with huge franchises like World of Warcraft, Guitar Hero and, most importantly, Call of Duty under its belt. The loss of even Call of Duty seems to me like it would significantly hurt the PS3. Still, the big question everyone is wondering is if Kotick has enough sway to actually force Sony into a price drop. Maybe Kotick's just blowing steam, but it'd be a crazy precedent for the largest publisher to drop the system entirely.GameSpy

Cutting prices would be difficult for Sony

Kotick's comments have weight because of the market strength of Activision. The company is the world's largest independent computer games company and has a market value of $16 billion.

Cutting PS3 prices would be difficult for Sony. The company last month reported its first annual loss in 14 years, caused by a strong yen and a sales slump in its consumer electronics business. While the economic downturn hurt sales, Sony also suffered from competitors' lower prices.

As a result, sales in Sony's electronics business fell 17% from the previous fiscal year, and revenue from its game unit fell 18%. While Sony sold more units of the PS3 and PSP, the company saw a drop in software sales. InformationWeek

PS3 could be Sony's last big console

Could Activision really be considering ditching the PS3? If so, this concept breathes a lot of life into the possibility that the PS3 could be Sony's last big console. Sure, the company would stay afloat if Activision was the only publisher to back away, but that might encourage a lot of publishers to get out of Dodge. Is Sony a sinking ship? (...)

I'm a firm believer in the idea that all three console makers should have a spot on the market. Competition breeds excellence and innovation. Sony cannot disappear, if they do... what would happen to gaming?Kombo

A total bluff

Sounds like a total bluff — I can’t see Activision pulling support from Sony, but I can see them attempting to influence PS3’s price by publicly threatening to.Wired

Sunday, June 07, 2009

How good is the futuristic Wii shooter ´The Conduit´? With many hopes pinned on a handful of more mature Wii games paving the way for a steadier flow of such titles, gamers, journalists and industry insiders are closely watching the critical and commercial reception of said games. Among them, ´The Conduit´ appears to be one of the big hopefuls with most observers, as well as the most controversial with some. While noone denies that it offers astounding visuals, its gameplay and originality are sometimes drawn into question.

A third and critical review has now surfaced that offers that very assessment. The score by the UK's Official Nintendo Magazine, though not catastrophic, is a sobering 76 percent. An article by GoNintendo which linked scans of the review got subsequently deleted and only exists in its Yahoo cache version. The review remarks:

It's really not bad at all. It looks nice, it feels nice and feels decidely grown up. Unfortunately it also feels about ten years old. The rosy whiff of Rare's ´Perfect Dark´ is detectable through much of ´The Conduit´, though that's no bad thing. The action is seemless and immediate, the story is fast-paced and full of conspiracy. (...)

The problem is you can detect the formula almost immediately. Run through a corridor, crouch behind a box and chuck a grenade, flush out side rooms, storm bigger rooms, restore health, repeat all over again. There's nothing wrong with that, it just might mean you lose the incentive to get through the whole ten or so hours of the game's single player campaign. (...)

The reason ´The Conduit´ falls short of must have status is down to the repetition on offer in terms of influences and design decisions. Levels often become a chore, especially the ones set in dull grey military facilities, while the drudge aliens are aptly named. For all its lack of inspiration, ´The Conduit´ is still an enjoyable shooter. Just don't expect miracles.

I find it slightly irritating that the review's tone is largely positive and does not appear, in my mind, to match the review score. The only criticism seems to be lack of originality and the article notes more than once that that is not necessarily a bad thing.

Article deleted

So why has the GoNintendo article been deleted? While the magazine itself insists that the game has officially not yet been rated, there are two alternatives. The most likely is that the rating stands, the publisher simply wants to prevent early publication. For the very same reason, GoNintendo recently had to pull an article based on information by the same magazine publisher.

The second, less likely explanation is that early publication of the rating has led to a formal complaint by the publisher and the rating has been recalled by the magazine. Often, reviews are based on review code, which may differ substantially from the final retail version. And sometimes, there is flawed communication between studio, publisher and reviewer about which aspects will still be changed. This is unlikely, but has happened before.

Other review scores

Let us assume the rating stands and compare it to the others. Nintendo Power gave ´The Conduit´ only a little more, at 80 percent. Here is a summary of their alleged explanation:

The Conduit – “worthwhile endeavor” but wouldn’t “make as big an impact on a competing console”

Cons-story is rote-enemy AI fails to impress-little innovation to speak of (outside if the controls)-level of detail in the environment can be inconsistent at times-no destructible environments-The “All Seeing Eye” is a cool idea but underutilized-the abrupt, Halo-esque ending (hints at a sequel?)

Finally, a German Wii magazine gave the game 87 percent. All in all, those are not catastrophic review scores, like I said before. But the fear is that if an official Nintendo magazine gives the game a 76, scores by important online portals like Gamespot or IGN could be lower.

Rave previews

What is also irritating is that the game received some rave previews. The Official Nintendo Magazine praised the game only in April. And the preview was written by the very same author. His review, as noted above, seems to find mostly praise for the game and differs little from the preview. It is mainly the review score that does not seem to fit the picture.

So how good is´The Conduit´? We simply cannot tell right now. It is reassuring to note that the graphics really appear to live up to the hype. But a little originality would not be a bad thing, either. It will be interesting to keep track of the game's Metacritic score, averaging all important reviews, as more scores come in.

Also, let us bear in mind that critical reception is not as important as commercial success. And even poor sales figures of ´The Conduit´ would not convince publishers that the Wii is no vehicle for mature games. But the title is an important piece in the puzzle and its commercial success will go some way towards more such games in the near future.

I've no doubt that overzealous system-hating fanboys will assert that there is nothing particularly special about The Conduit, but I don't believe that. In my experience, the title features the tightest, most comfortable control scheme of any console-based first-person shooter to date and that's true because of an innovative, highly customizable configuration that's already changing the way developers approach FPSs on Wii. (...)

Meanwhile, the technology powering the experience is leaps and bounds ahead of most third- party offerings for Nintendo's system. Combined, you've got a game that controls flawlessly and looks great. If you're okay with a few presentational cliches -- a story involving aliens that seems played out -- and a shooting experience that rarely strays from straightforward running and gunning, you're probably going to love the end product. If, on the other hand, you own another system, nothing The Conduit offers, fantastic controls aside, will seem extraordinary. Supposing you are a single console owner, though, High Voltage's shooter not only delivers a fun single-player quest, but an engaging online mode that will keep you fragging complete with WiiSpeak support for months to come.

Wednesday, June 03, 2009

So, the three press briefings have come and gone. What remains? Quite obviously, Microsoft had the biggest surprise in store for us. Project Natal is certainly ambitious and may serve to position the Xbox360 quite differently in terms of target demographic. Nintendo, while briefly showing that odd finger sensor had almost no surprises when it comes to hardware. Team Ninja working on a new Metroid game was the big news of the briefing and it is hard to exaggerate the ramifications of this collaboration, given Nintendo’s poor track record with third party developers in the past.

Immediately, arguments ensued over whether Xbox360’s Natal or Wii’s Motion Plus will be the more accurate system. But that appears to be an academic debate. The big question in my mind is: where does that leave Sony? The truly gargantuan sales figures of a ´Brain Age´ and a ´Wii Fit´ clearly show where the gaming mainstream has shifted to (or rather, where the new mainstream has been discovered). This is precisely where Nintendo is positioned and it clearly is where Microsoft would like to be with Natal. Sony, however, will have nothing to offer this new mainstream. If they really are working on a Wiimote-like controller themselves, they will show it no earlier than E3 2010 and it will launch no earlier than 2011. This will be too late for this generation because, in my mind, by 2011, Microsoft and Nintendo will be talking about their successor consoles. And with the next generation of consoles, no one will care about a PS3 peripheral.

It seems quite obvious that the PlayStation3 will be falling behind even further, after the E3 announcements. While mainstream gaming has shifted (and opened up to millions new gamers in the process), Sony has remained where the mainstream used to be. Of course, ´God of War III´ will be a spectacular game. But, in terms of sales figures, it will be a niche product and fail to move substantial amounts of hardware. Especially given that Sony boss Stringer will not allow a price cut until Christmas at the earliest. I am absolutely sure: Sony will remain in third place for this generation and I am even less optimistic about Sony’s progress in the next console cycle.

EDIT I stand corrected. Sony did show motion controls other than the Sixaxis. I was unable to watch the Sony conference and really had not seen the motion control section in Joystiq’s live transcription. Sorry. Thanks to Some Guy for pointing out my mistake.

It is interesting to note that I wrote about the patent most likely implicated by this technology back in 2005 and I even tried out a similar prototype at the 2001 ECTS, London’s former videogame expo. There, a webcam connected to the PlayStation2 was tuned to certain bright colours and had the dimensions of various tools and weapons stored in memory. Holding a brightly coloured plastic sword or mace, the console could estimate a 3D position based on the object’s dimensions by comparing them to the actual view in perspective. This way, the same weapon was replicated in the game and moved almost in real-time to my movements. Considering this was fake 3D – since the console only estimated a spatial position based on the distorted perspective of a 2D image – it worked pretty well. It seems to me that the demo shown at the Sony conference was almost the same technology and will work the same way.

However, even if the technology shown will be available next year and works well, it is still no comparison to Nintendo’s and Microsoft’s real 3D motion controls. The only advantage is that Sony’s approach should work with a standard webcam, which will make it the cheapest of the three. But the experience may be less immersive, too. So I stand by my initial judgement: Microsoft may be successfully moving on what now is Nintendo’s turf – the new mainstream – but Sony will most likely fail to catch up.